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I can't resist jumping in on this conversation. First, if the case for cash transfers applies to donor aid, it should also apply to resource revenues in mineral rich countries. In both cases, the money comes from outside and the citizens aren't able to hold the government accountable for its spending. Second, Suvojit, your point about administrative capacity, if it applies to cash tranfers, should apply just as much to other government programs. If a government cannot manage to distribute cash to its citizens, why do we think it can distribute education, health care, clean water and sanitation? In many ways, distributing cash taxes scarce government capacity less.